If you are on this site, there is a good chance you do not need a lot of convincing that the groundswell of video in marketing is here to stay. There is no denying that audiences of all shapes and sizes are expecting video content. According to Cisco, more than 80% of all Internet traffic will be video by 2021. It is the same reason the drive through lane at Starbucks will remain long, even though the line inside is shorter. People like convenience. They also like watching instead of reading and that is not going to change.
All you have to do is google, “video marketing statistics”, and you will find a plethora of stats to make any C-level executive call a meeting on their state of video. Therefore, content marketing is on the rise, and anyone doing content marketing is trying to add video to the mix.
However, despite our obvious conflict-of-interest, this does not mean we advocate for unlimited video spending (although…). Even if you are completely sold on video, there are still ROI questions that must be answered. We have to understand that a video is only a container. It is what you put in that container that will determine whether it is successful. We can say the same thing about a website, or a trade show booth. Of course you have to have them, but in and of themselves they are not valuable. It is what you put in them that will determine whether they are successful. You most likely already know you need to have video as part of your content marketing plan. The question becomes, are our videos having the desired effect? What can we change to improve their effectiveness? This is part of a long-term strategy to not just have video, but to be effective with video.
Understanding ROI helps you answer questions, such as:
- What should our annual video budget be?
- What types of video should we be making?
- What level of production value do we need?
- How long do our videos need to be?
- How much do we need to allocate for promoting our videos through paid media?
- Which videos work best on our various distribution channels?
- Which videos work best in each phase of our customer journey?
The reality is that you cannot answer any of these questions without understanding how to calculate video ROI.
Before we discuss methods to calculate ROI on specific videos, it’s important to remember that there are two things to measure. The first, is the metrics on specific videos. The second, is the metrics on your overall video library. This is much harder to put a number on. Unless you are very advanced with your martech and your analytics game is cutting edge, the chances are that you will only have anecdotal evidence about the value of your overall use of video in your marketing. It’s kind of like asking, what is the ROI on our website? It is a much bigger question, that is difficult to quantify, since it falls under general branding. That said, if you are actively tracking the types of metrics we are about to describe for every video, then you will be able to roll all of those stats up into an overall all metric that will give you a sense of the ROI on your video library as a whole. The vast majority of marketers are simply not there yet.
Start With Specific Objectives
It all starts with setting a specific objective. We can boil these down to three different overall objectives. Once we understand the metrics we can discuss how they relate to determining ROI as it relates to that objective.
- Brand Awareness
- Customer Service
- Sales Enablement
These stats might give you a better idea of how your videos are impacting brand awareness, however, determining true ROI is a bit trickier. Brand awareness in general is difficult to measure unless you have a method and benchmark already in place. For example, what is the ROI of MetLife putting their name on the Giants and Jets football stadium, or the ROI of Chevrolet putting their logo on the Manchester United jersey? Brand awareness is simply difficult to measure. That is why we like these stats to help evolve your video content strategy, but for proving ROI they are limited in what they can quantitatively prove.
- Views: This is the simplest and most top-of-mind metric. It is also the least sophisticated. Views are nice to know, but they really don’t tell you if the viewer is moving along in the sales funnel/customer journey, or elevating you above the competition in their mind.
- Engagement: What we mean by this is how many viewers share, like or comment on video. This is usually a good indication of whether a piece of content is inspiring your audience to action.
- Play Rate: This is the percentage of viewers that are watching the entire video. Or, some like to think of it as the average amount of time the video is watched. Industry standards say this should be at least 60%.
- Backlinks/Referral Traffic: A useful metric to see if other people are valuing your content.
Video is an excellent way to answer questions that normally would have to be answered on the phone by a representative, or by a lengthy web page or pdf. When measuring the effectiveness and ROI on these types of videos, the process is more straight-forward. Play Rate, as discussed above, would be a good indication of whether the content is helpful. However, to determine ROI you need to compare operation costs without video and then see how they can be reduced with video. To test the ROI, you could start with one video or group of videos and create a pilot program for measurement.
This is the metric we think is absolutely critical, and the one that should be used to determine how much you should be investing in video. What we are talking about is conversions. In the modern world of digital marketing, the conversion is king. It is indisputable proof that a potential customer made a choice, which moved them along in the customer journey.
For B2B marketers this usually means some type of form next to or beneath the video. This could be for lead capture, whitepaper download, newsletter signup, etc. For B2C it usually means moving through an e-commerce funnel, or some type of signup (newsletter or social media follow, etc.). We highly recommend having a form associated with every video on your website. If the video is on social media, YouTube, LinkedIn or other external platforms, the link next to the video should take the user to a specific landing page. In addition, depending on what video platform you use, you might be able to tie into your CRM, marketing automation software or whatever type of martech you have. That allows you to attribute an eventual sale back to a video or piece of content. Seeing that customer journey laid out in front of you is extremely valuable.
Whether the conversion setup is simple or complex, this is the one metric that can give you a much better idea of ROI.
With or Without You— A/B Testing
Another principle to help you determine ROI is A/B testing. When you add video, do the results improve? For example:
- What happens to the CTR, when you add video to an email campaign?
- What is the difference in conversion rate when you add a video to one of your landing pages?
- How much more time do users spend on your site when you add video?
- How many more social media followers do you get per post when it is video as opposed to just a photo or graphic?
- Does video speed up the customer journey?
These are tests you can setup without a ton of complexity to show you what the impact your videos are having.
The reality is that determining video ROI goes beyond simply looking at views. Determining true ROI really comes down to how sophisticated your measurement and analytics infrastructure is. However, no matter how sophisticated it is, you can create a simple conversion or setup an A//B test to give you the data you need. Video marketing is still evolving and the more work you put into it now, the more it will drive value in the new and in the future.